Wednesday, December 30, 2009

EDITORIAL >> Arkansas gets a nice break

Senator Blanche Lincoln has many things to answer for in the great health-insurance imbroglio of 2009, but one of them is not her failure to bring home the pork for Arkansas. The Republicans seeking her seat and the Republican leader of the Senate, Mitch McConnell of Kentucky, razzed her for voting for insurance reform last week without demanding special benefits for her home state like Senator Ben Nelson did for Nebraska.

Tuesday, the stateís big newspaper joined the chorus. Why, oh why, cried the Arkansas Democrat- Gazette, did she not demand extra cash for some benefit or a special project somewhere in Arkansas as a condition for supporting the bill? The people of Arkansas ought to demand answers from her, the paperís editorial page said in fake piety.

Put another way, why did Senator Lincoln insist on being principled when a few others practiced the grimiest kind of politics? She can point out that she succeeded in getting more favorable treatment for small businesses, but of course the favor helped businesses in all 50 states, not just Arkansas.

The better answer is that Arkansas didnít need special treatment. The bill that emerged from the Senate treats Arkansas better than any other state. Senator Lincoln just cannot claim to have been responsible for it.

We donít know what will finally come out of the conference between the two houses this winter, but the central provisions of both the Senate and House bills are a godsend to Arkansas. No state is apt to have the net cash inflow as Arkansas when the provisions are fully implemented.

Here is why: Arkansans will pay fewer taxes per capita to pay for the health-care overhaul than nearly every other state, and Arkansans will qualify for more and larger government subsidies for private health insurance and a higher percentage of low-income adults in Arkansas will qualify for Medicaid, the government insurance program, than any other state. The rest of the country, especially rich states like New Jersey, New York and Wisconsin, will be subsidizing Arkansas with their tax dollars.

This requires some explanation. If the Senate version prevails, the principal source of income for the benefit programs will be an increase of 0.9 percent in the Medicare payroll tax for single taxpayers earning more than $200,000 a year and couples earning more than $250,000. Very few Arkansans will be paying that little tax although to hear the TV ads and Republican broadsides, everyone in Arkansas will be paying through the nose.

Up to certain income levels, individuals and small businesses that buy private insurance through the new government exchange will qualify under both bills for some government help. Since Arkansas has a much higher quotient of people under the income thresholds, more people will qualify for the assistance and for larger sums than nearly every state.

But the biggest bonanza is Medicaid. The Senate bill would extend Medicaid insurance to adults up to 133 percent of the federal poverty line and the House bill up to 150 percent. Only Alabama comes even close to realizing the enormous benefit that Arkansas will see from the Medicaid expansion.

Every state provides some Medicaid coverage to poor parents of children in the Medicaid program, but Arkansas provides it to fewer. Only parents up to 17 percent of the poverty line and no childless adults qualify for Medicaid in Arkansas. Other states already provide insurance for adults earning from 24 percent of poverty (Alabama) to 200 percent of poverty or more (Minnesota, Maine, Wisconsin, New Jersey, the District of Columbia).

Since other states already do what the bill would do or come close and pay up to half the costs themselves, the Medicaid expansion will bring little new cash into the states.

By weekís end, states like California, Wisconsin and New Jersey were complaining that they were not happy sending their tax dollars to states like Arkansas that had done so little for the poor themselves.

Well, we were just too poor to do it ourselves, or thought we were. Besides, Arkansas put its limited resources into insuring medical care for children and the elderly. We didnít have anything left for the working poor or we had higher priorities.

Whatever passes this winter ó and something assuredly will ó in three or four years lots of cash will be sloshing through the medical institutions in this state and that will help us all, from the neediest to the richest.

Senator Lincoln, Senator Pryor and the two Democratic congressmen who have joined the cause cannot claim personal credit, but they need to offer no apologies either.